China is already one of the world's biggest economies, and now its financial industry is growing fast. The Chinese government aims to turn Shanghai into an international financial center by 2020, and the global markets are eyeing the massive opportunity presented by the country's increasingly affluent population of 1.3 billion potential investors. To help you navigate the notoriously closed Chinese market, Wall Street & Technology has created the following snapshot of China's asset management industry and the local IT providers that service it, as well as details on the top Western vendors that are vying to provide their technology to Chinese financial firms. We've also included tips on what you need to know to do business successfully in China as well as the latest news emerging from the region.
Beijing: China's Silicon Valley
Zhongguancun, in Beijing's Haidian District, is home to a vibrant community of tech entrepreneurs, investors and experienced professionals. Most major IT companies in the world have offices there, including Google, Sun Microsystems and Microsoft. It is also home to some of China's most prestigious universities (and talented technology students), including Tsinghua University and Peking University.
The Chinese government has created a number of incentives in the area for "high-tech incubators," including clusters of office space for startups, offered rent-free for one year and with heavily subsidized rents in the second year. The most successful of these incubators is the Tsinghua Science Park, which also houses Google, Sun Microsystems, Microsoft and Deutsche Bank.
Microsoft is currently building a new facility in Haidian. When it is finished in 2010, it will be Microsoft's largest research center outside the U.S.
China's official aim is to build its economic powerhouse, Shanghai, into an international financial center by 2020.
The Lujiazui Finance and Trade Zone in the Pudong New Area is home to the Shanghai Stock Exchange as well as to many financial institutions.
The Shanghai World Financial Center, which has 101 floors and was completed in 2008, is located in the center of the Zone. It was designed to represent Asia's emergence on the global financial scene.
At the end of 2007 (last available figures) the Shanghai Stock Exchange had 860 listed companies with a combined market capitalization of US$3.7 trillion (RMB26,983.887 billion), making it the largest in mainland China and sixth-largest in the world.
Types of securities traded: Currently heavily focused on accelerating bond market development; also trades stocks, warrants and funds.
(Located in Hangzhou, Zhejiang, 112 miles southwest of Shanghai.)
Hundsun Electronics Co, established in Hangzhou in 1995, dominates the Chinese securities and mutual funds markets. Key products and services include the Multiple Currency B2S System Enterprise, designed to manage and perform FX transactions and buy and sell securities, and a complete foreign exchange trading desk and back-office system that maintains currency positions, maturity schedules and management reporting. Also provides outsourcing for clients in Japan and the U.S.
Contact: Clarence Zhang www.hgsamerica.com/profile.htm
Tel: +86 571 2882 9559
Fax: +86 571 2882 9529 zhangli@hundsun.com
Kingstar
Acquired by SunGard in 2006, Shanghai-based Kingstar provides software and processing solutions for local financial services in the areas of exchange management (futures, securities and gold trading), investment and risk management, brokerage and data warehousing, as well as solutions for higher education.
www3.sungard.com/AsiaPacific/default.aspx?id=4538
Guangzhou: Economic Center of the Pearl River Delta
Guangzhou's urban land area is the third-largest in China, ranking only after Beijing's and Shanghai's. It is the economic center of the Pearl River Delta, one of mainland China's leading commercial and manufacturing regions.
Shenzhen, which is in southern China's Guangdong province immediately north of Hong Kong, is southern China's major financial center. It is home to the Shenzhen Stock Exchange as well as China's new Nasdaq (GEM), and also hosts the headquarters of numerous high-tech companies and financial firms.
The SSE has signed cooperative memoranda of understanding with exchanges worldwide with the aim of mutual benefits and development. These include the Tokyo Stock Exchange, Korea Exchange, Australian Stock Exchange, Singapore Exchange, London Stock Exchange, Toronto Stock Exchange, Osaka Securities Exchange, Berlin Stock Exchange, National Stock Exchange of India, Chicago Board Option Exchange and Chicago Mercantile Exchange.
Created in 1990, the SSE has a market capitalization around RMB1 trillion (US$122 billion). On a daily basis around 600,000 deals, valued at US$807 million, trade on the SSE. It is the ninth-largest stock exchange in Asia (2008) by market capitalization.
Types of securities traded: Shares, bonds and funds.
Chairman: Dongzheng Chen
President & CEO: Liping Song www.szse.cn/main/en/
Tel: +86 755 8208 3333/3570
Fax: +86 755 8208 3333/3571
Growth Enterprise Market (GEM): China's Nasdaq
The China Securities Regulatory Commission has just greenlit Shenzhen's second stock exchange, due to open in late summer/fall 2009.
Eighteen tech-related Chinese companies, all based in Beijing's Zhongguancun district, are set to float shares on the stock exchange.
www.UPIAsia.com
Shenzhen Kingdom Sci-Tech
Shenzhen Kingdom Sci-Tech's products include a centralized exchange system, fund products and IT operation products.
Based in Shenzhen, Ysstech is a major vendor in the Chinese asset management industry. Its asset management system includes the popular fund accounting module Golden Finger.
Hong Kong's stock market was the seventh-largest in the world and the third-largest in Asia in terms of market capitalization at the end of September 2007, according to the Hong Kong Economic and Trade Office in the U.S. It is also one of the biggest asset management centers in Asia, and the regional center for portfolio management activity. It counts 82 local representative offices of overseas banking institutions, including 68 of the world's largest 100 banks.
Hong Kong is considered the financial center of East Asia. It counts 82 local representative offices of overseas banking institutions, including 68 of the world's largest 100 banks. Here is a list of restricted license banks incorporated in Hong Kong -- banks principally engaged in merchant banking and capital market activities.
Restricted license banks incorporated in Hong Kong
AIG Finance (Hong Kong) Limited
Allied Banking Corporation (Hong Kong) Limited
Bank of America Securities Asia Limited
Bank of Baroda (Hong Kong) Limited
Bank of China International Limited
Canadian Eastern Finance Limited
Citicorp Commercial Finance (H.K.) Limited
Citicorp International Limited
GE Capital (Hong Kong) Limited
Hang Seng Finance Limited
Indover Bank (Asia) Limited
Industrial And Commercial International Capital Ltd.
J. P. Morgan Securities (Asia Pacific) Limited
KDB Asia Limited
Kookmin Bank Hong Kong Limited
Mitsubishi Securities (HK), Limited
Mizuho Corporate Asia (HK) Limited
N.M. Rothschild & Sons (Hong Kong) Limited
Orix Asia Limited
Pacific Finance (Hong Kong) Limited
Quam Limited
Scotiabank (Hong Kong) Limited
Shinhan Finance Limited
Societe Generale Asia Limited
UBAF (Hong Kong) Limited
Chartered Bank Limited
Hong Kong Exchanges and Clearing
By the end of 2007 the Hong Kong Stock Exchange had 1,241 listed companies, with a combined market capitalization of US $2.7 trillion. It is Asia's third-largest stock exchange by market capitalization, behind the Tokyo Stock Exchange and Shanghai Stock Exchange.
Types of securities traded: Derivatives leader in the Asia-Pacific region; also cash and equities.
The government is not involved in the day-to-day regulation of the securities and futures industry in Hong Kong. The SFC, established in 1989, is an autonomous statutory body which has regulatory oversight of the HKEx and its subsidiaries.
Primary Financial Technology Vendors in China
Information and resources about the large Chinese financial technology vendors, as well as a short list of some of the Western technology providers with operations in China.
